Arjun Company uses the equity method to account for its 40% investment in Joshua Company common stock. Joshua’s net income was $160,000; dividends paid were $85,000. Arjun was able to take a 65% dividend exclusion on its tax return. The tax rate is 20%. How much is the deferred tax liability? ($160,000 -$85,000) x .40 x .35 ($160,000 - $85,000) x .40 x .20 ($160,000 - $85,000) x .40 x .35 x .20 ($160,000 - $85,000) x .40 x .65

Griffey Communications recently realized $120,000 in operating income. The company had interest income of $25,000 and realized $70,000 in dividend income. The company’s interest expense was $40,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends. Which of the following most closely matches the tax liability of Griffey Communications?

ABC Corporation owns 20% of DEF’s stocks and receives $3,500 in dividend income. It is in the 34% marginal tax bracket, and its average tax rate is 25%. 5. Since ABC Corporation is invested 20% in DEF’s stocks, _____ of the dividend income will be taxed. a. 0% b. 35% c. 65% d. 100% 6. The tax on the dividend income alone is equal to _____. a. $1,190 b. $773.50 c. $262.50 d. $416.50

Burgher Ltd. had a taxable loss of $318,000 in 20X7. The tax rate in 20X7 is 32%. In the past three years, the company had the following taxable income and tax rates:    20X4 20X5 20X6 Taxable income $ 212,000   $ 127,200   $ 84,800   Tax rate   36 %   38 %   40 %   There are no temporary differences other than those created by income tax losses. 1. What is the amount of refund that will be claimed in 20X7, taking the loss back to the oldest possible year, first? Provide the journal entry for income tax receivable in 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)     2. Is there a different pattern for claiming a refund that will maximize cash flows for the company? Recalculate the refund and provide the journal entry using this alternate pattern. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)